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Mr. Dalyell: The national service regiment in which I served, which made me an honorary member of its mess, is shortly to go to Kosovo. May I ask, therefore, exactly what is happening in Mitrovica and what are the medium and long-term aims? There is great concern about that.
Mr. Hoon: There is clearly great tension between the two communities in Mitrovica. British forces, together with other police forces and others, have been involved very recently in seeking to ensure continued stability there, but I do not necessarily recognise a description of what took place as a riot. I saw on the television yesterday, as perhaps my hon. Friend did, a British commander describing the demonstration as essentially good humoured. It speaks volumes for the experience and ability of our armed forces that they were able to resolve the situation so professionally. Clearly we are concerned and shall maintain vigilance to ensure that it does not get out of hand.
Mr. Menzies Campbell: I am most grateful to the Secretary of State for giving way. He is showing considerable generosity. As he knows, I support the European security and defence policy, but he, like me, attended the recent Munich conference on security at
which there was substantial representation from both the Senate and the House of Representatives. Is it not clear that we have some way to go to allay the anxieties of legislators in the United States? I believe that we can do that. Will he accept from me that we may be able to help to allay those anxieties by accepting that there should be a formal right of first refusal for NATO before any EU action is contemplated?
Mr. Hoon: As the right hon. and learned Gentleman said, I was present at the conference. I spoke there and discussed that issue with a number of members of the House of Representatives and the Senate. I recognise that some legislators have some concerns. I cannot possibly expect to be able to allay every single one of them, because the United States, like the United Kingdom, is a robust democracy in which there is a wide variety of views. We have work to do and we continue to do it.
I visited the United States last month and was encouraged by the support that I found for what we are trying to do. In particular, the US Administration are with us, which is why they signed up to the European defence initiative at the Washington summit last year and have continually repeated their support for it ever since, not least during my visit. As Strobe Talbott, the US Deputy Secretary of State said last December:
Mr. Iain Duncan Smith (Chingford and Woodford Green):
I should say at the outset that our support and respect for the members of the armed forces is not in question and will not be disputed by any Member of the House--certainly not any Opposition Member. The Secretary of State was correct to say that they serve in the most difficult circumstances and deliver for this country a service of which we can be justifiably proud. If we ever needed a reminder of their skills and quality, it came in the past few days at Mitrovica. I say without fear of contradiction that the arrival of British troops in that area added greatly to the stability that then ensued. They dealt with difficult circumstances, which could easily have flared up and become worse, and the sheer quality of our
I agree with the Secretary of State that the strategic defence review was, in essence, debated correctly and welcomed if not in its entirety, then for its central thrust. It would be churlish to say otherwise as I happen to be one of those who published a pamphlet calling for an SDR perhaps two years before the Labour party in opposition came to the idea. A few of my hon. Friends were also involved. I not only thought that an SDR was a good idea, but had high hopes and expectations when it happened. The question is, what happened as a result of the review and what is happening now? The key judgment about which the Secretary of State talked is correct: the review will be judged not on the high hopes of that time, but on what has been delivered. That includes the critical issue of what money has been made available.
To set the debate in context, we must begin with what the SDR delivered in budgetary terms. For all the criticisms of the previous Government about reducing budgets when Labour were in opposition, the fact is that the defence review went on to reduce the budget further. According to Library figures, the reduction is about £800 million, but that is in cash terms and depends on certain variables. If it is not a point blank budget saving of £800 million, much will depend on the in-house savings that have been identified to avoid having to bear the full brunt of the reduction.
It is important to identify the two critical areas, because we need to know whether we are likely to make progress and whether the recommended savings will be made. The first is the smart procurement programme. As Conservative Members know--I am sure that Labour Members also know this, although they will not admit it--Ministers are experts and masters at launching, relaunching and re-relaunching their best initiatives, or at least what they want most of all to be in the public domain, and defence is no exception. The Government think that merely by the inclusion of the word "smart"--just like they use the word "modern"--they will avoid any further scrutiny because it sounds good, warm common sense, so everyone will go along with it.
I have talked to some of my former colleagues and right hon. Friends who were in the Ministry of Defence in the previous Government, and they maintain that many of these plans were already in place. We did not call it smart procurement, because we were not as good at dressing up our proposals as we were at delivering them. I am pleased that the Select Committee did not fall into the trap of accepting that when it says "smart" it really means that.
At the heart of that programme is a saving of at least £2 billion to be delivered over 10 years. If the Government are unable to deliver the total package or, almost as importantly, cannot deliver the saving in time spread over that 10-year period, the defence budget will come under greater and greater pressure.
Cash flow is important at this juncture because there are serious doubts about whether the Government will deliver on the agreed timings. General Burton's departure last summer highlighted that. The Government made little comment about his criticisms and concerns, which came to light in the press. He was seriously angry about the
pressure that Ministers were putting him under to deliver ahead of what he recognised was possible because they had flagged this up as part of their major savings. They were able to spin the idea that they were having to save less by saying that they would deliver more earlier under the smart procurement programme.
Nothing in the White Paper allays General Burton's concerns. It does not even refer to them. As ever, it glosses over the whole issue, and gives us no figures for the Government's achievements against their targets--a point that the Select Committee spotted. Worse still, the industry is already indicating that it is coming under greater pressure from the Ministry of Defence to slow down the submission of invoices so that they fall in the next financial year. That is real short-termism, which I thought smart procurement was supposed to end. That will lead to more pressure the following year, and, although people may not realise it, more expensive contracts subsequently. In this area at least, we have moved from smart procurement to stupid procurement in two short years.
The Select Committee report underlined how crucial the sale of the Defence Evaluation and Research Agency was to the Ministry of Defence's budgetary calculations. Apparently, the MOD stands to gain some £250 million from the agency's partial privatisation, but the Government are now fraught with arguments and problems, not least the antipathy of the United States Government to the plans.
The Secretary of State faces a stark choice. Either he proceeds with the mess that he has on his plate--admittedly he inherited it--thus alienating the Americans and damaging his relationship with the defence industry, which has expressed grave concerns about the unfair nature of what he may be about to propose, or he faces a hole in his spending plans. All that for £250 million. We may end up jeopardising a critical part of our relationship with the United States, which is very important to the special relationship, which delivers intelligence and technology and is unique to the United Kingdom.
On top of all that, most controversially, comes the three-year efficiency saving. The White Paper contains little of substance on that. The Select Committee report rightly questions whether the 3 per cent. efficiency saving will be anything more than a 3 per cent. cut. The Government produce no evidence to prove their claims, and we are left with the evidence of cancelled exercises, shorter flying hours for the RAF and other pilots and cuts in some of the medical programmes. If the efficiency saving is not delivered, that will punch a further £500 million hole in the Government's allowance for in-house savings.
In paragraph 159, the Select Committee said:
Part of the great saving envisaged in the strategic defence review was the change to the Territorial Army--I use the word "change" advisedly, because it was nothing more than a pretty savage cut. Some 18,000 men were slashed from the Territorial Army as part of the package of savings offered to the Treasury. Now the Government are sending contrary messages about the use of the TA, which the Secretary of State got bogged down in when he tried to describe how it may or may not be used in the future.
In the strategic defence review, the Government said that, although it would not normally be appropriate to call out formed units of the reserves at short notice, we should be prepared to do so if that were necessary to complete the build-up of a large military force in an international crisis, such as the Gulf war. However, the Government have not discussed that with members of the TA. The Government and those who operate on their behalf hardly know where many members work. They have little data on the nature of their work and how to call them up. They have no data worth talking about on the reserves. There has been a panicky change of policy, and there is little chance of delivering it in reality. It is more about window dressing than anything else.
Furthermore, the change to the TA has flown in the face of the experience of Kosovo. Something like 40 per cent. of the TA deployment in the Balkans is infantry--the very group that has been slashed.
There are still unanswered questions about equipment for the TA. I know from many of my conversations with TA soldiers that they are concerned about the fact that, when they try to train in the evenings or at weekends--especially the signals regiments--they find themselves without equipment, because much of it has been deployed and they are left with little to train with. As a result, their training has fallen short. Nothing in the White Paper explains how that problem will be resolved; there is a gaping hole.
The key element in the White Paper that we should try to understand is the effect of any failure in the areas that I have just described. What is important is not what the Government talk about: the key issue is what effect their policy has on the effectiveness of our armed forces.
The Secretary of State was keen to talk about exercises. The Select Committee said that two major UK exercises had been cancelled because of financial constraints. The first was the Marines' arctic warfare exercise in Norway. The Secretary of State wrote to me to explain that he had been incorrect when he originally said that it had been cancelled due to commitments: it was because of budgetary constraints. The second was HMS Westminster's participation in the Flotex exercise. In fact, HMS Westminster found itself sitting in the Thames, waiting for the much-hyped new Labour new millennium.
I suppose it was good to have something British sitting near the dome over the new year--or at least something that worked. I do not know whether the Secretary of State had much to do with that, but congratulations are in order, even if they are not directed to those who run the dome, to the Secretary of State or to the Minister responsible.
The Select Committee said:
"There should be no confusion about America's position on the need for a stronger Europe. We are not against; we are not ambivalent; we are not anxious; we are for it. We want to see a Europe that can act effectively through the Alliance or, if NATO is not engaged, on its own. Period. End of debate."
Our American allies understand that the proposal is not about weakening NATO. It is about strengthening it and getting rich Europeans to pull their weight in their own defence. That is realised in Washington. It is a pity that, for whatever reason, it is not realised by some here.
"There is, it seems to us, a fundamental implausibility in the total efficiency claimed by the MoD over the years . . . in other words that the MoD is simply doing less with less money".
That is the key. There has always been a suspicion that, as the budget came under pressure, greater savings would be justified as a more efficient way of doing things. If the savings are merely a cut, they will be deeply damaging to the overall ability of the armed forces, and to the doability--a horrible word--of the strategic defence review.
"Given that so many exercises had to be cancelled because of over commitment it is deeply worrying that there was insufficient money to pay for some of even the residual exercises planned. Without regular exercises for high intensity conflict, standards in our Armed Forces will plummet, whatever the quality of the people and equipment."
22 Feb 2000 : Column 1409
The Committee also said that the pressures created by operations had led to the cancellation of some eight NATO exercises.
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